SYNOPSIS
This cartoon clearly illustrates that we would all do extremely well with time machines. But it also hints that static forecasts are pretty useless. Any analyst might say that the S&P 500 will be up by 6.2% by year end, or a particular stock will double in six months. If it happens, it’s totally coincidental; and you’ll easily find that no one gets anything even remotely correct with forecasts like that twice. But dynamic analysis is a different story. We know how fast stocks and indexes are rising right now; and we know from academic studies that stocks and indexes trending up will continue to do so… well above what would be expected by chance. Fool proof? No, but we don’t need to predict target prices and dates. We go with the flow and exit when the trend peters out. How simple is that?
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) rnudged up a couple percentage points to 86%. The S&P 500 APAR gained another 10% to 23%, while the TSX APAR finished only slightly higher from last week at 5%.
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Last Week in the Indexes… All of the US major indexes charged ahead again last week, while the Canadian indexes continued to fall. The S&P/TSX Composite Index managed a tiny gain, but the small cap indexes kept falling.
Investor Confidence… The May results for the State Street Investor Confidence Index were released this past week. The Global ICI increased to 102.5, up 5.1 points from April’s revised reading of 97.4. The improvement in sentiment was driven by an increase in the North American ICI from 95.1 to 104.1
As usual we chart the regional results as well in the full edition of TrendWatch Weekly.
Seasonality… We have a new 1-minute video from Brooke Thackray on the anticipated downside in Information Technology stocks during June. Tech stocks have been on a roll lately, but you might want to postpone any new purchases until the beginning of July.